Alexander: NLRB Proposal Good News for Nation’s 780,000 Franchises

Would require businesses to have direct control over worker’s employment to be considered a “joint employer”

WASHINGTON, September 13, 2018—Senate labor committee Chairman Lamar Alexander (R-Tenn.) today released the following statement after the National Labor Relations Board (NLRB) released a new proposed rule on the “joint employer” standard:

“The NLRB’s proposed rule is good news for the men and women operating our nation’s 780,000 franchises. It would return to the standard that for decades required that for a business to be considered a ‘joint employer,’ it must hold direct control over the terms and conditions of a worker’s employment.”

Alexander continued: “The Obama Administration’s expansion of the ‘joint employer’ standard threatened to destroy the American Dream for owners of a franchise business. That decision said that merely indirect control over employees’ working conditions could make a franchisee and franchisor joint employers – discouraging large companies from franchising at all. The NLRB’s new proposed rule would return to the earlier joint employer standard and restore a path to the middle class for small businessmen and women across the country. This is good news for all Americans who value the opportunity to work hard and climb the ladder of success.”

A decision by the Obama Administration’s NLRB on a case in 2015 changed the standard so that it took just indirect control over the employees’ terms and conditions of employment, or even unexercised potential to control working conditions, to be a joint employer. Under the 2015 standard, companies could find it much more practical to own all their stores and restaurants and day care centers themselves, rather than encourage more franchisee-owned small businesses.

Alexander has fought the board’s joint employer decision since 2015, when he introduced legislation to overturn the Obama Administration standard. He has held hearings on the joint employer decision, and oversaw the confirmation of three new Republican board members.